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The government has withdrawn an appeal to the Supreme Court that – if successful – would have meant that families could no longer claim enough housing benefit to pay for separate bedrooms for disabled children with high support needs.

The decision by the Conservative work and pensions secretary Iain Duncan Smith followed a week in which the prime minister had used the court ruling to try to show that his government was supporting disabled children, even though it was attempting to have the judgment overturned.

The Court of Appeal ruled last year that the Department for Work and Pensions (DWP) had breached the Human Rights Act by stating that local authorities could not provide housing benefit for the extra bedrooms needed by four young disabled people living in private rented accommodation.

Duncan Smith had been seeking to appeal the ruling to the Supreme Court, but decided this week to withdraw his appeal.

Linda Burnip, whose son Ian is one of the four young people, said it was “very satisfying” that DWP had withdrawn its appeal, following a five-year legal battle.

She said: “This case reinforces disabled people’s right to not be discriminated against within the benefits system and also affirms their rights under the UN Convention on the Rights of Persons with Disabilities.”

Her son’s lawyers, Irwin Mitchell, said the “landmark” Court of Appeal judgment clearly set out how to “ensure that disabled people are not discriminated against by the government’s benefit system”.

The decision to drop the appeal means the government’s controversial “bedroom tax” will now not apply when a disabled child with high support needs is unable to share a bedroom with a sibling for impairment-related reasons.

The bedroom tax – to be introduced on 1 April – will see benefits cut if a household in social housing is judged to have more bedrooms than they need.

DWP yesterday (Wednesday) issued new guidance for local authorities, which lays out how local authorities will decide if children should not have to share a bedroom, and will apply in both social housing and private rented accommodation.

Irwin Mitchell said it was “disappointed” that the guidance did not protect other disabled people, such as couples who are unable to share a bedroom, who will “continue to be discriminated against” by the bedroom tax.

Polly Sweeney, Ian Burnip’s solicitor, said: “We believe the government has not properly understood the serious impact of these changes on some of the most vulnerable people in society, and would urge them to think again.”

Despite the decision to drop the appeal, Duncan Smith claimed there had been “no climb-downs at all” by his department.

He told Channel 4 News: “These are adjustments already because of the court case over the severely disabled children for local housing allowance [housing benefit] so this is nothing to do with it. This is a reality. We simply put the guidance out there to say this reality exists.”

It is still unclear what impact the appeal decision will have on a different court case, an attempt by 10 individuals and families to seek a judicial review of the impact of the bedroom tax on disabled people.

Anne McMurdie, who represents three of the claimants – a disabled man with a mental health condition, the father of a disabled child who shares caring duties with the child’s mother, and a disabled woman cared for by a parent in a significantly-adapted property – said the government’s announcement was “not entirely clear in many respects as to how it will work and who is covered”.

McMurdie, from Public Law Solicitors in Birmingham, said the government had until the end of Monday (18 March) to produce its written response to the judicial review claims.

She said: “At that point we hope to have a clear picture about what concessions or exemptions apply in these cases and to whom and whether the regulations themselves will be amended. Once we have this info we can decide how to go forward.”

The author of a government report on disability employment has welcomed an extension of the Access to Work (AtW) scheme to some disabled entrepreneurs, but has called for funding to be extended even further.

From Monday (14 January), disabled people moving into self-employment with support from the New Enterprise Allowance (NEA) scheme can claim AtW cash for equipment, support workers and travel costs.

The measure was announced last November and trialled in Merseyside, before this month’s national rollout across England, Wales and Scotland.

NEA provides access to a volunteer business mentor, a weekly allowance for the first six months, and possible access to a loan of up to £1,000 to help with business start-up costs.

Esther McVey, the new Conservative minister for disabled people, admitted last October that spending on AtW had plummeted from £107 million in 2010-2011 to just £93 million in 2011-12, while the number of disabled people claiming funding had fallen from 37,000 in 2009-10 to just over 30,000 in 2011-12.

The following month, McVey announced a series of measures – including allowing disabled people on NEA to claim AtW support – to “strengthen and improve” the scheme.

Some of the measures were recommended by Liz Sayce, chief executive of Disability Rights UK, in her 2011 report for the government on employment support programmes.

Sayce welcomed the decision to extend AtW funding to disabled people on the NEA scheme.

But she called on the government to “systematically” make AtW available for “every type of work experience, traineeship, internship and business set-up”.

She said AtW was available for work experience under the government’s Youth Contract and the Jobcentre Plus Work Trial scheme, but not for the supported internships about to be rolled out nationally for young disabled people.

She said: “It is vital that Access to Work should be available for all the major routes into employment including setting up your own business, work experience, traineeships and internships, otherwise disabled people who need simple things like an interpreter or support worker will have no chance of equality in getting into employment.”

She said this risk was “particularly acute for young disabled people, who risk becoming a new generation lost to employment – being twice as likely as young non-disabled people to be not in education, employment or training.”

A Department for Work and Pensions spokeswoman said the new measure was “not specifically” a recommendation from the Sayce review, but was “in line with her recommendations to focus funding on sustainable work and career choices, including self-employment”.

There are currently 0.5 million self-employed disabled people (15 per cent of those in work), compared with 13 per cent, or 3.2 million, of non-disabled people in self-employment.

McVey said: “We’ve opened up our flagship programme so that disabled people have the same choice to start up their own business as everyone else – in every sector, from hairdressing to engineering and everything in between.”

Hundreds of thousands of disabled people who claim disability living allowance (DLA) will not have to be reassessed for at least two years, after the coalition announced a major retreat on its reform timetable.

Esther McVey, the Conservative minister for disabled people, told MPs today that working-age disabled people with a lifetime or indefinite DLA award would now not be reassessed until October 2015 at the earliest, six months after the next general election.

The government is introducing a new personal independence payment (PIP) to replace DLA for working-age claimants.

The intention had been to begin reassessing all current DLA claimants from next year, but McVey told MPs this was being delayed because ministers had “listened carefully to concerns about the speed of reassessment”.

This could save the government from the prospect of many tens of thousands of disabled people having their benefits cut or withdrawn, and possibly their Motability vehicles removed – with many having to quit their jobs as a result – in the run-up to the next election.

McVey also announced that the new PIP rates would be set at the same level as DLA, with the DLA higher and middle care component rates replaced by PIP daily living standard and enhanced rates. There will be no PIP daily living lower rate. The two PIP mobility rates will be the same as the current DLA rates.

She also confirmed that PIP and DLA would continue to be uprated every year by the rate of inflation.

McVey said PIP would first be introduced for new claimants in the north-west and parts of the north-east of England, from April 2013, and rolled out to all new claimants nationally from June 2013.

But despite the delays, tens of thousands of disabled people will still face having their benefits cut or removed from next year. Reassessment of existing DLA claimants will begin in October 2013, for those whose DLA award is due to end, who report a change in their condition, or who reach the age of 16.

McVey said about 560,000 of this group would be reassessed by October 2015, with 160,000 likely to have their support cut, and 170,000 having it removed completely. The other 230,000 people will receive the same or more support than under DLA.

McVey confirmed that the government wanted to target support on those “most in need”, and that almost a quarter of those receiving PIP would receive both of the higher rates – worth £134.40 per week – compared with only a sixth of claimants who receive the two higher rates of DLA.

Dame Anne Begg, the disabled Labour MP, welcomed the decision to delay the implementation of the reforms, but added: “I hope they will continue to keep the timetable under review because I suspect it will not be as easy as the minister implies today.”

And she attacked the government’s use of rising numbers of DLA claimants as an excuse for cutting spending.

She said: “If more people are getting DLA then more people are living independent lives and more people are engaging in society in a way they were not doing previously.”

Anne McGuire, Labour’s shadow minister for disabled people, questioned why the government refused to carry out a “cumulative impact assessment” of all of its welfare changes on disabled people.

McVey said Labour never carried out such an assessment itself when it was in power and claimed that “for such large reforms and changes like that it would be impossible to measure the impact”.

McGuire also asked her for a commitment from the government not to remove DLA from any disabled person in work.

And she questioned why PIP rates were being set at the same level as DLA if the government was promising “more support for those with the highest support needs”.

There was also anger in the Commons after Conservative backbencher Philip Davies accused Labour of wanting “unlimited levels of welfare”, and added: “Most of my constituents will support the principle that the money should be directed at those people that need it instead of those people who do not.”

The disabled Labour MP and former home secretary David Blunkett said Davies’ remarks were “a disgrace”.

The Department for Work and Pensions (DWP) is set to break its promise to publish thousands of public responses to its controversial disability living allowance (DLA) consultation by the end of this year.

The DLA consultation took place from 6 December 2010 to 18 February 2011, but the government was subsequently accused of misleading parliament and the public about the scale of opposition to the reforms.

Now disabled activists are claiming DWP is resisting their attempts to obtain proof of the overwhelming opposition to its plans to replace DLA with a new personal independence payment (PIP).

Disabled activists who worked on Responsible Reform – published in January and also known as the Spartacus Report – had analysed the 523 responses to the consultation that were submitted by disabled people’s organisations, disability charities and other groups.

But they have so far been unable to examine the individual responses, which they believe will show just as strong opposition to the reforms, due to be implemented from April 2013.

The Spartacus Report found that 99 per cent of groups objected to DLA no longer being used as a “passport” to other benefits; 92 per cent opposed plans to remove the lowest rate of support for those with care needs; and nine in ten opposed plans for a new assessment.

But in the government’s response to the consultation, there had been no suggestion of such a high level of opposition to its plans.

DWP even claimed later that it had not carried out any basic statistical analysis of these and other answers to the consultation responses.

Lord Freud, the Conservative welfare reform minister, said in a letter to fellow peers that group responses had made up only 10 per cent of the consultation, and that the Spartacus Report had ignored nearly 5,000 individual responses.

He said all 5,000 had been “thoroughly and appropriately considered in the Government’s analysis and have been used to inform the design of the new benefit and supporting processes”.

In the wake of his comments, disabled activist Sam Barnett-Cormack used the Freedom of Information Act to ask DWP to publish these 5,000 individual responses. It promised to do so – “in tranches” – by the end of this year.

But so far, less than three weeks from the end of 2012, not a single response has been published.

Barnett-Cormack said: “It’s clear that the DWP is using any tactic they can to delay or prevent the release of these documents.

“I find it very unlikely, especially given the DWP’s behaviour, that the individual submissions will substantially change the picture we got from the group submissions – massive disagreement with the Government plan.

“The fact that the consultation was described by the Government as supporting their plan means, if our suspicions are correct, that the Government is perfectly willing to use dirty tricks and misrepresentation to support their ‘reforms’.”

Disabled activist Sue Marsh, co-author of the Spartacus Report, said the government’s failure to keep its promise was “disgusting and shameful”.

She said: “The government said these other responses would show that actually there was great support for PIP. I said they wouldn’t.”

She accused DWP of “whitewashing” the consultation, and has already warned that she will write to every MP and peer to tell them the government lied about the consultation responses if it fails to back up its claims.

A DWP spokeswoman refused to say why it had failed to meet its own deadline, and would not even admit the deadline had been set, despite Disability News Service sending her a copy of its own Freedom of Information Act response.

She said: “We are sorting through the 5,000 individual responses to the DLA consultation and intend to publish them in tranches on the website as soon as we can.”

The panel set up to review a vital piece of equality legislation has been packed with Conservative and Liberal Democrat politicians, adding to fears of a new government assault on disabled people’s protection from discrimination.

The government also appears to have failed to include any disabled equality experts on the 11-strong review panel.

The review of the public sector equality duty (PSED) was announced by the government in May this year when it published the equalities section of its “red tape challenge”, which is looking at the “bureaucratic burdens” of legislation on business.

Leading disability rights figures have been warning that key parts of the country’s equality legislation are under threat from the government, and even fear that the coalition wants to scrap the PSED altogether.

The PSED forces public bodies – such as councils and government departments – to have “due regard” to the need to eliminate discrimination when forming policies.

The new review panel, expected to report in April 2013, is being chaired by the former Tory MP Rob Hayward, a former board member of the gay rights organisation Stonewall, who is joined by three Liberal Democrat and Tory local politicians, and Dr Munira Mirza, deputy mayor for education and culture for the Conservative mayor of London, Boris Johnson.

Another member is Rachel de Souza, the head of a high-performing academy school in Norfolk, who won praise from right-wing commentators by bringing in former members of the armed services to keep her school open in November 2011 when teachers were striking over their pensions.

De Souza was also one of four school leaders invited to Downing Street for a meeting with David Cameron and his education secretary Michael Gove in January.

There are two senior civil servants on the panel, Jonathan Rees, the director general of the Government Equalities Office, and Charlie Pate, a senior Treasury official.

The other three members are Stephen Otter, the former chief constable of Devon and Cornwall police; Paula Vasco-Knight, the chief executive of an NHS trust and national equality lead for the NHS Commissioning Board; and Baroness O’Neill, recently appointed by the government to chair the Equality and Human Rights Commission.

Last month, David Cameron, the prime minister, claimed judicial reviews, public consultations and equality impact assessments (EIAs) were slowing the pace of government reforms, and announced that he was “calling time” on EIAs and “all this extra tick-box stuff”.

His comments led Sir Bert Massie, who chaired the former Disability Rights Commission, to warn that the PSED, the Equality Act and the whole equality agenda were “under threat”.

As well as the equality duty review, which has been brought forward from 2015, the government has already slashed the budget of the Equality and Human Rights Commission (EHRC), and delayed the implementation of discrimination laws that were due to be introduced as part of the Equality Act.

A Government Equalities Office spokeswoman said the steering group was “not intended to be a politically representative body” but that its members had been appointed “because of their experience across the breadth of the public sector”.

She added: “We will not pre-judge the outcome of the review. We are determined to explore the issues rigorously.”

Asked why there appeared to be no disabled person on the panel, she said: “We have not sought detailed information about individual members’ protected characteristics.

“This is because members were selected because of their experience of the public sector, not because of particular protected characteristics.”

The announcement came as a government report found strong support among businesses for equality laws that prevent discrimination in areas such as recruitment and promotion, although two-thirds of those surveyed admitted knowing nothing about the contents of the Equality Act.

The employers – mostly small and medium-sized businesses – were nearly all supportive of laws that would ban selecting an employee for redundancy on the basis of their sexual orientation (90 per cent), and refusing to promote a woman because her husband practised a particular faith (90 per cent).

But they were less supportive of laws that would prevent an employer refusing promotion to a disabled employee because they had taken a lot of sick leave in the previous year (56 per cent).

The EHRC said the report showed that most businesses “support equality in the workplace as a benefit rather than a bureaucratic burden”.

More than 1,800 businesses across England, Scotland and Wales were surveyed between November 2011 and January 2012.

The government must back Lord Justice Leveson’s call for disabled people’s organisations to be allowed to lodge complaints with the press regulator about misleading and disablist newspaper coverage, say campaigners.

A letter published in The Guardian this week says disabled people, alongside other minority groups, have experienced “sustained levels of misleading, hostile and discriminatory reporting in the press”.

Activists say there is strong evidence that such reporting has caused an increase in disability hate crime.

The letter welcomes the conclusion by Leveson – in his report on press standards – that the presence of “a significant tendency” within the newspaper industry has led to the publication of “prejudicial or pejorative” references to disabled people and other minorities.

Leveson’s report says a new press watchdog would need to “address these issues as a matter of priority”, with the first step allowing groups representing minorities to lodge “third party complaints”, with the possibility of fines, corrections and apologies if the newspaper was found to have breached the relevant standards.

The “editor’s code” of the current press watchdog, the Press Complaints Commission (PCC), says newspapers must avoid such “prejudicial or pejorative” references, but provides no protection for minority groups if no individual has been identified in a story.

This has given newspapers freedom to run articles portraying disabled benefits claimants as “scroungers” and “fakers”, with the PCC powerless to act.

The letter was written after a Conservative MP told the Daily Telegraph – one of the newspapers criticised by Leveson for publishing misleading stories about disability benefits – that third party reporting could lead to “sinister” and “politically motivated” complaints.

This week’s letter to the Guardian says third party reporting is “critical to ensuring a right of redress and a voice for minority groups”, and was “not a slippery slope to the press being ‘hijacked’ by ‘sinister’ pressure groups” but would “give those who are so often the victims of sensationalist and prejudicial headlines the basic right to make a complaint”.

Hundreds of thousands of disabled people without work are to be hit hard by further cuts to their support, despite the chancellor’s claims in his autumn statement that he was protecting disability benefits.

George Osborne announced this week that he would restrict the annual “uprating” increase in most working-age benefits to just one per cent for the next three years.

He claimed this would not include “disability benefits”, which would increase instead by the rate of inflation, but said it would apply to employment and support allowance (ESA), the new out-of-work disability benefit.

The extra element for those not expected to take part in any work-related activity – the support component, currently £34.05 – will rise by the rate of inflation, about 2.2 per cent, while the various ESA “premiums” will also rise by at least the rate of inflation.

Osborne said the measures would save a further £3.7 billion in 2015-16, added to the £18 billion a year already slashed from welfare spending under the coalition.

He also announced new budget cuts of one per cent next year, and two per cent the following year, for government departments that have already seen their budgets slashed since 2010, while local authorities will see their central government funding cut by another two per cent in 2014-15.

Only one of 90 backbench MPs who quizzed the chancellor in the subsequent two-hour debate mentioned the impact of the cuts on disabled people.

Osborne again appeared to be trying to drive a wedge between those in and out of work by saying that he needed to be “fair to the person who leaves home every morning to go out to work and sees that their neighbour is still asleep, living a life on benefits”.

He was criticised earlier this year by a disabled Conservative parliamentary candidate when he spoke about the unfairness of a “shift-worker” leaving for work early in the morning who looks up and sees “the closed blinds of their next door neighbour sleeping off a life on benefits”.

Many activists pointed out that there were good reasons why many disabled people would have their blinds or curtains closed early in the morning, related to both their impairments and the crisis in social care.

Disability Rights UK welcomed the protection for disabled people from the very low rises announced for some benefits, but said it was “very disappointed” with a number of other measures in the autumn statement, including the one per cent increase in ESA.

And it pointed to Osborne’s failure to mention social care spending, or provide any extra resources for cash-strapped social services departments, and warned that with the further cuts in government funding for councils it was “inevitable that disabled people and carers will lose help altogether or face ever higher charges for very basic support”.

The only politician who mentioned disability in the Commons debate that followed Osborne’s statement was Labour’s MP for Tottenham, David Lammy, who told the chancellor that “passing on a two per cent cut to local government will involve cuts to adult social services across the country, affecting the vulnerable, the disabled and the elderly”.

In reply, Osborne claimed the coalition had provided “billions more for social care”.

The Hardest Hit campaign – a coalition of organisations representing disabled people – said the one per cent rise in working-age benefits had “come at a time when the government’s Work Programme is failing to help disabled people back into work”.

It said that the chancellor’s decision on ESA “would mean a significant cash loss for thousands of disabled people who rely on this money to live their daily lives”, while other below-inflation rises to benefits such as working tax credits and housing benefit would pose “a serious threat” to disabled people’s independence and “a major compromise on quality of life”.

Steve Winyard, a Hardest Hit spokesman, added: “The 1.3 per cent portion of ESA claimants securing work through the Work Programme is a risible return and reflects not a desire [by] the other 98.7 per cent of claimants to stay in bed, as the chancellor appeared to suggest, but huge inefficiency in Work Programme contracts and ongoing barriers to work for disabled people.”